commercial - htw

CommercialDecember 2020

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Month in ReviewDecember 2020

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Big box retail – the sector saviour of 2020

VANESSA HOEYMelbourne Herron Todd White retail specialist

ANGELINE MANNCommercial Director, Herron Todd White Sydney

By Kieran Clair

Across all property categories, the retail sector has arguably faced the steepest uphill battle over the past decade or so.

The onslaught of online, its reliance on a strong domestic economy, the struggle with consumer spending habits – there are multiple forces pulling on retail at any moment.

And then there was COVID.

The fast shutdown of operations, adaptation to new protocols and the administrative challenges of government support have all taken their toll.

What sometimes gets lost on observers is that while most Aussies think retail means just fashion, food and specialty stores lining covered walkways in major shopping centres, the sector is actually a broad church. It encapsulates businesses from CBD-based high-end outlets to your stand-alone mum-and-dad storefronts and everything in between.

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And there’s one facet of retail that has not only endured the past few years, but tightened its grip on the spent dollar during 2020.

Large-format retail (LFR), sometimes referred to as big box retail, has flourished during the pandemic… but does it have enough momentum to carry it into 2021?

Defining the spaceFor the uninitiated, LFR refers to those often suburban-based expansive outlets where a single user occupies a football field worth of square meterage.

“When we talk of big-box retail, it’s stores like Bunnings, JB HiFi and Ikea,” said Angeline Mann, Commercial Director at Herron Todd White Sydney.

“They have features such as extensive parking, onsite stock storage and a wide product range in situ.”

Ms Mann said the onset of the pandemic saw LFR strengthen its position.

“Of course, these assets are often owner occupied, but there are situations such as homemaker centres where the owner of the property will have a number of large-format tenants taking up their space.

“They’re destination outlets – they attract shoppers to them. You can drive in and out easily, parking usually isn’t a problem and their audience is targeted.”

One jurisdiction with a special perspective on LFR is Melbourne.

“It was tough here in Melbourne for retailers during the second lockdown from July to October,” said Melbourne Herron Todd White retail specialist, Vanessa Hoey.

“It created a disparity in the market when valuing

retail assets. There were businesses that qualified for rent relief under the Commercial Code of Conduct and we had to make allowance for that in our valuations. So, when we complete our valuation, we have to adjust for periods where the landlord wasn’t receiving full rent,” Ms Hoey said.

“It also impacted investment (as opposed to owner occupiers) because there’s less investor demand for properties with tenants affected by lockdowns and that included LFR.”

However, Ms Hoey said prime assets still did well in the LFR space.

“There are private investors out there with a lot of money who want to invest, but there’s been a lack of supply, especially for investments under $50 million.

“It created a bit of a two-tiered market – those with high quality, secure tenants on long leases versus those with poor quality tenants or vacancies.”

Ms Hoey said an excellent example was the sale of 7-9 Baker Street, Wangaratta for $8.1 million in November this year which reflected a very tight 3.68% yield. The property housed a Dan Murphy’s liquor outlet on a 12-year lease.

“There was a huge amount of demand from investors for this, according to the agent.”

The LFR advantageMs Hoey said there were distinct upsides for LFR during COVID.

“There’s a large carpark space and good access for click-and-collect retail. Also, when shoppers are

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7-9 Baker Street, Wangaratta Source: realcommercial.com.au

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unemployment, so they’ll be cautious about spending.

“Also, we’re watching how the international border opening progresses. We want to see people shop here and overseas visitors coming in will have an important effect on retail.

“I think by the second half of next year, things will be perhaps be more positive.”

as hardware and furniture and I think that will continue for some time.

“That said, economic conditions are paramount for all retail; factors such as increased consumer spending and confidence. And I say that because the Ikeas and Bunnings might survive and do really well, but then there’s still a risk for some of the smaller retailers in the space. If you do see the supply of available space in LFR rise, this will hold values in check rather than see them increase.”

Ms Hoey also felt momentum was good at present, but many consumers might fall back on old habits once the troubles have passed.

“I think people might go back to their regular shopping patterns once we are beyond the pandemic, although it could take some time.

“The biggest challenges for retail property are high vacancies and downward pressure on rents, and that trend is going to continue. Also, when tenants come up for renewal, they’re re-signing leases for shorter terms – even just one to two years – and while landlords mightn’t have done that before, now they’re happy to get a tenant so they can avoid vacancies. Tenants have more negotiating power right now.”

Ms Hoey said she’s watching wider metrics to determine how retail in general, and LFR in particular, might track in the near future.

“One of the first things will be the end of JobKeeper early next year. People might have lower incomes and we could be facing higher

in large format, they don’t feel as though they’re pushed into a small space – they can make room for each other – and that gave some comfort during the pandemic.”

She said adaptability during COVID had been pivotal to their success.

“Before 2020, some operators might have looked at their large format and thought the space was too big, but this abundance of space has proved to be the sector’s advantage during COVID,” Ms Hoey said.

Ms Mann agreed that large format retailers benefited from pandemic lockdown conditions.

“Outlets such as Bunnings – because everyone was renovating – or JB HiFi with electronics and home computing saw turnover pick up during the lockdown.”

Ms Mann said that in addition, many LFRs are located within suburban catchments, so when travel restrictions were in place, they remained accessible to the population.

She said there are disadvantages to owning and operating LFR assets as well, the main one being scale.

“A big area means a big cost for the businesses and the real estate owners. Maintaining this cost would have been a huge burden when pandemic uncertainty set in.”

Into the futureMs Mann said some of the consumer momentum of 2020 will help propel large-format retail in 2021.

“Because people aren’t traveling for holidays and are instead setting up home offices or renovating their houses, they’re consuming more goods such

“Outlets such as Bunnings – because everyone was renovating – or JB HiFi with electronics and home computing saw turnover pick up during the lockdown.”

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Liability limited by a scheme approved under Professional Standards Legislation.

This report is not intended to be comprehensive or render advice and neither Herron Todd White nor any persons involved in the preparation of this report accept any form of liability for its contents.

Entries coloured purple indicate positional change from last month.

National Property Clock: Retail

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RISING MARKET

Start of Recovery

BOTTOM OF MARKET

DECLINING MARKET

Approaching Bottom of Market

PEAK OF MARKET

Approaching Peak of Market

Starting to Decline

Central CoastSouth East NSW

EchucaGeraldtonIpswich

NewcastleSydneyToowoomba

CairnsCanberraGeelongGippsland

Gold CoastMelbourneMid North Coast

Sunshine Coast

AdelaideAlice SpringsDarwinEmerald

GladstoneRockhamptonTownsville

BallaratBendigo

Brisbane

Burnie-DevonportLaunceston

Adelaide HillsBalina/Byron Bay

Barossa ValleyBundaberg

Hervey BayLismoreMackayMildura

Coffs HarbourHobartIllawarra

PerthSouth West WA


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New South Wales OverviewIf ever there were a year where an operational crystal ball would’ve come in handy, surely it was 2020.

The retail sector and its property markets were facing challenges before the year began, but the pandemic really upped the ante for the industry and its stakeholders.

This month, our teams take a look back on 2020 in retail property markets. And while there were triumphs and challenges, it’s the resilience of those dealing in retail around the nation that we can all learn from.

Sydney 2020 has been a turbulent year for the retail market. Earlier in the year we were predicting a reduction in the market for retail property. Our advice was that investors were being cautious but that the market had been tracking well up until that point. We had noted rather strong capital value growth and tightening of capitalisation rates throughout 2019. Our concern at the start of the year was that the market could not continue to grow at the rate that it was and there were early signs that the market was due to slow down.

Unfortunately, the impact of COVID-19 has been far reaching for the retail market. That said, some areas have fared worse than others.

Of particular concern has been the rental market. We have been monitoring the situation and have seen an increase in tenants who have been unable

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CEO’S ADDRESS 2020 has been described in many ways such as significant and challenging, innovative and unprecedented.

Of course, our progression through the pandemic is not over, and its legacy is still to be defined. That said, if past months have taught us anything, it’s that we can collectively find the solutions we need to be able to service our clients and operate under any circumstance.

Our year at Herron Todd White has been marked by significant events as well. We established new protocols to address challenges that came with COVID restrictions, including the development of our Contactless Inspection Tool – a feat which culminated in our team being presented with the Australian Property Institute’s prestigious 2020 Innovation Award.

We also welcomed some of the industry’s most respected professionals to our ranks, including former Queensland Valuer-General, Neil Bray, and one of Australia’s most respected property experts Kevin Brogan.

Each year, our December issue of Month In Review is devoted to looking back at various markets and describing how they performed over the preceding 12 months.

And, of course, this year’s report makes for essential reading.

In this month’s commercial section, we see two of our most astute retail sector experts – Sydney director, Angeline Mann and Melbourne retail specialist, Vanessa Hoey – discuss Large Format Retail in 2020 and its likely performance in 2021. It’s a fascinating study of this dynamic space from renowned authorities in their field.

In the office submissions this month, we’ve homed in on all retail in 2020 where our teams have discussed a number of significant outcomes including:

◗ The effect of the Commercial Code of Conduct on asset values;

◗ Landlords finding paths to support retail tenants and retain tenancies; and

◗ The run to quality that saw strong sales prices for many blue-chip investments.

I hope everyone has a safe, enjoyable holiday season and an exciting New Year. We look forward to partnering with you in 2021, to ensure you make the most of your property assets.

Gary Brinkworth CEO

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to make their rent commitments along with many who have had to avail themselves of the rental relief offered by the Code of Conduct. We have noted that many businesses, especially in the hospitality industry, have simply not reopened following COVID-19 lockdowns. This has been coupled with an increase in fashion and general retail chains that have reported declining revenue, store closures and, in some instances, insolvency.

In response to the uncertainty surrounding the rental market for retail property, we have noted a decline in interest from investors for retail assets. Properties with short weighted average lease expiries and those with tenants that are viewed as insecure or uncertain have reflected notably higher yields. We are beginning to see evidence to suggest that capital values are now declining.

Areas that seem to be most impacted by a reduction in demand are those that rely on late night trade. Examples include Surry Hills, Potts Point, Kings Cross and to some degree neighbourhood strips such as Newtown and Balmain. The CBD has also been particularly impacted, with only a percentage of the workforce returning to the city. As a result, there is a significant reduction in retail trade opportunities and we have noted an increase in tenants under stress.

At the start of this year, we predicted a general slowing of the market and lack of demand from investors as we thought most would wait to see the outcome of recent media coverage, global events and the collapse of many major retail chains. Reflecting on this and knowing what we know now, we would certainly have been far more cautious and pessimistic about our predictions for retail for 2020.

Angeline MannCommercial Director

Newcastle Retail activity in the Newcastle and Hunter Region areas is really a tale of two markets.

While selling activity has been limited, retail properties with long lease expiry profiles and secure tenants (think Coles, Woolworths, McDonalds, KFC, service stations) are seeing ever decreasing yields rates and record high sale prices. This is especially evident in the non-discretionary retail market, which is seen as a defensive purchase option in the current market.

Small scale local retail investment properties are a different story. While these properties have been actively selling, more strongly so if the tenant is long term and a well-established business, the sale prices in this market sub-segment have been relatively stagnant, brought down by a relatively limited appetite for vacant possession properties in this space. Any vacant property that appears to have any additional risk, such as fringe locations or limited exposure, are rarely selling at present. Those that are selling are at a discount to what we would have expected to see say one year ago.

There is significant risk to small retail businesses when the federal government’s JobKeeper payments are reduced to zero in March 2021. Should there be a second lockdown in Newcastle due to a COVID-19 outbreak, these businesses would fold without this additional government stimulus. This is seen as a real possibility in the market and in the short term, caution, hence limited activity, is the prevailing sentiment.

Ed ThwaitesDirector

WollongongThe events of 2020 have turbo-charged the change that was already occurring in the retail sector, an industry that has been evolving for quite some time due to the advancement of online shopping and supply chain efficiencies. Some retailers and locations have fared better than others however the true impacts of COVID-19 across the retail market will not be felt until the various government measures and assistance packages are wound back, namely rental relief and JobKeeper. It is with this in mind that we will be watching very closely the start of 2021.

The regional markets and suburbs have been withstanding the COVID-19 impact better than the larger capitals largely due to work from home directives that have left CBD office buildings near empty. We are all hoping this situation is resolved in 2021.

There has been a clear flight to quality in 2020 with investors adopting a defensive strategy. On this basis, we have seen yield compression for quality assets underpinned by strong long term corporate leases in very high demand. This has been particularly evident for service stations and service centres, liquor and supermarket assets in high population growth areas or established desirable capital city locations.

Wollongong is well positioned to adapt to the changes in the retail sector due to its strong population growth, desirable coastal lifestyle location and proximity to Sydney, however planning legislation needs to keep pace with the natural and forced COVID-19 changes this sector is experiencing.

Scott RussellDirector

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localities. With the expectation of a long term low interest rate environment, we have seen quality assets with long term national tenants experience very strong demand with lower yields and upward movement in values.

Over the past six to nine months, assets with local tenants or vacancy have had very little market interest with generally weakening yields and falling value levels, however in recent times the owner-occupiers have become much more active at the lower end of the market. With a strengthening retail market and the prospect of a long-term low interest market, owner-occupiers are recognising that they are able to secure a premises without the uncertainty of leasing and the repayments costs are lower than what they would pay in rent. This has been particularly so in Lismore where four recent purchases have all been owner-occupiers, three relocating from leased premises and one a start-up business.

So, moving forward, signs are generally positive with the lowering of social distancing requirements increasing tourist numbers and the expectation that a vaccine for COVID-19 is nigh.

We are also witnessing what appears to be a generational change in people choosing to relocate from urban areas seeking a superior lifestyle. The north coast is well placed to accommodate this movement given affordability, availability of direct flights to Sydney, good internet (NBN) coverage and relatively easy driving distance to the large markets of the Gold Coast and Brisbane. Ultimately what will limit this will be supply.

Martin GooleyProperty valuer

and coffee drove some businesses to new heights while retail sales remained much more subdued. Government support in the form of JobKeeper allowed many businesses to survive difficult times.

Social distancing requirements continued to ease yet travel to Queensland remained difficult and retail demand started to improve across much of the north coast. The number of tenants receiving rental relief began to decline and many businesses are returning to a more sustainable position.

The level of uncertainty remained, yet there was also a level of quiet optimism that economic conditions would soon improve.

The tourist market which has been our strongest asset has again started to lead us out of the lows of an otherwise uncertain future. Tourist localities have shown significant strengthening with key markets being sought after by those seeking to escape the isolation and uncertainty that surrounded them during the height of the social distancing requirements. This is likely to continue as Victoria reopens and the Queensland and New South Wales border restrictions ease.

With no international travel, our iconic localities will approach 100 per cent occupancy rates and the demand for holiday accommodation will spread out to the lesser known yet equally attractive locations.

The majority of retail property became almost unsalable during the darkest days, however we saw glimmers of life with some investors seeing it as an opportunity to acquire assets in strong

Lismore2020 could be described as a ten year property cycle jammed into ten months.

Retail was in an uncertain position at the start of 2020 with different property cycle positions in different localities. Coastal localities with strong tourist markets and growing populations continued to perform well with steady to good tenant demand and steady to increasing rents, and their markets appeared sound. Inland markets appeared less certain with a retail sector in contraction, decreasing tenant demand, increasing vacancies and downward pressure on rents. Investors showed little interest in these markets and owner-occupiers were decreasing as some businesses failed or were experiencing reducing sales.

The start of COVID-19 appeared to impact all retail sectors with most businesses closing their doors due to social distancing requirements and other restrictions. Commercial property managers were under siege as tenants sought relief from the impact on their businesses and the level of uncertainty and fear grew.

As a general observation, most landlords agreed to rental reductions in the order of 50 per cent on a monthly basis during the height of the crisis.

At this time retail property was near unsaleable, with agents reporting sales falling over and little to no enquiries.

As time passed and social distancing regulations eased, businesses started to reopen. Trading varied – high levels of demand for takeaway food

2020 could be described as a ten year property cycle jammed into ten months.

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to claims will usually include a below the line adjustment for loss of rent which is deducted from the capitalised value.

There is evidence for prime retail assets with sound leases and strong tenants being sold at firm yields based on the low interest rate climate and the relatively low yields available from alternative investments.

Ken PotterProperty valuer

Coffs HarbourThere was an oversupply of retail accommodation in Coffs Harbour prior to the influence of COVID-19. Since the pandemic, there have been broad scale registration and negotiations for rental relief.

Local commercial agents have indicated that circa 80 per cent of retail tenant claims have been settled at rent relief based around a 50 per cent discount of monthly rent for an initial period of three months. The discounting within major shopping centres is reported to be higher, with landlords recognising that retention of tenants is the number one priority through the initial phase of the COVID restrictions.

Agents report very few business closures and those that have are mainly linked to businesses that were struggling prior to the pandemic.

Local businesses are gradually reopening subject to social distancing requirements but there is likely to be ongoing ramifications for retail premises associated with restaurant dining, cafes and entertaining as the economic effects of compliance are recognised within the business expense structure. This may well impact the operator’s ability to meet rents struck pre-COVID and also require landlords and tenants to revisit the size requirements for these premises to remain viable through the pandemic compliant period.

The valuation of investment property affected by claims for rent relief or likely to be subject

Local commercial agents have indicated that circa 80 per cent of retail tenant claims have been settled at rent relief based around a 50 per cent discount of monthly rent for an initial period of three months.

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MelbourneSince March 2020, the COVID-19 pandemic has had a significant impact on the Melbourne economy and the retail property market.

Throughout 2019 and up until early 2020, the Melbourne retail investment sales market generally remained steady with firm yields reflecting the limited availability of quality stock and solid purchaser demand. Particularly strong results were being achieved for well-located properties with long term leases to major national retailers and for those with longer term development potential.

Throughout most of 2020 there have been limited major sales of retail property. Since implementation of Stage 3 restrictions in early July 2020, public on-site auctions in metropolitan Melbourne have been banned and forced to move back online. During Stage 4 restrictions, in-person property inspections were also banned. Discussions with a number of selling agents confirmed that properties that were due to be auctioned were converted to expression of interest campaigns whilst others were postponed indefinitely. We understand that in many cases where a vendor does not have to sell the property, it is being held until there is a greater level of market certainty.

During 2020, properties with strong lease

83 Church Street, Brighton Source: Gorman Commercial

Address: 83 Church Street, Brighton VIC 3186

Sale Date: July 2020

Sale Price: $3.2 million

Purchaser: Private investor

Yield: 2.93%

Rate per square metre of GLAR: $21,053

Site Area: 240 square metres

GLAR: 152 square metres

Zoning: Commercial 1 Zone (C1Z) under the Bayside Planning Scheme

Building: An older style, two level property which comprises a retail tenancy on the ground floor and an upper level, currently utilised as an office, which could be a residence with three bedrooms and one bathroom

Car Parking Spaces: Three open car spaces

Tenant: Lauren Browne Pty Ltd trading as Motto

Use: Women’s clothing store

Lease Term: Five years commencing 1 August 2018 with one further option term of five years

Base Rent: $98,800 per annum plus GST

Current Total Net Income: $93,825 per annum plus GST (following deduction of non-recoverable land tax)

WALE: 3.04 years

Comments: Sold privately following a campaign conducted by Gorman Commercial.

Victoriacovenants to national operators or those with tenants operating essential services which have demonstrated strong turnover volumes during the pandemic period, such as supermarkets and liquor stores, continued to attract demand from purchasers when available for sale.

Our research, including discussions with selling agents, indicates that there are currently very strong levels of purchaser demand for prime retail assets and specifically for single tenant properties with long term leases to the two major supermarket operators, Woolworths Group Limited and Coles Supermarkets Australia Pty Ltd. Demand exists for assets within this market in the range of up to $40 million from private investors who are high net worth individuals, or syndicates seeking security of income and potential longer term capital growth. There is currently limited stock of quality assets of this nature available for sale. The majority of private investors hold this asset type on a long-term basis.

In some prime suburban retail locations, such as Church Street, Brighton, where properties are infrequently traded and tightly held, the limited transactions which have occurred in 2020 continued to demonstrate strong results.

The sale of a retail property at 83 Church Street, Brighton is summarised as follows:

Demand exists for assets within this market in the range of up to $40 million from private investors who are high net worth individuals, or syndicates seeking security of income and potential longer term capital growth.

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in discretionary spending during the remainder of 2020 and in 2021. Once the government support measures such as the JobKeeper allowance expire, which is due to be March 2021, there could be increased unemployment and further reductions in wage levels. Non-discretionary spending such as supermarket and food shopping is likely to remain strong however discretionary spending on clothing, footwear and household goods is likely to remain at low levels.

Most retail businesses including pubs, clubs, restaurants and cafes in addition to beauty salons, hairdressers and other non-essential services within metropolitan Melbourne were allowed

inspections. Of the lease deals that have occurred we have noticed a trend towards incorporating longer rent-free periods at least until the end of lockdown periods plus additional rent-free periods and shorter initial terms.

The limited number of new leases that occurred during the lockdown periods were for operators who provide essential services. We also understand there has been an increase in new lease enquiries for smaller retail space from food and beverage operators adapting to the increase in demand for takeaway and home delivery services.

With the continued economic downturn and job uncertainty it is likely that there will be a reduction

As prime retail properties with secure long term leases and strong lease covenants continue to be attractive to investors, conversely there has been a decline in demand for secondary or vacant properties. It is expected that there will be a greater divergence between yields for prime and secondary properties over the next 12 months. Due to the ongoing effects of the pandemic and economic uncertainty there is evidence of weaker buyer demand, extended selling periods and potentially diminution in asset values particularly for secondary properties within areas with existing low tenant demand and high vacancy rates.

Retail spending growth throughout Victoria was already subdued prior to the pandemic and this has been exacerbated during the various lockdown periods in 2020. There has been increasing pressure on retailers’ occupancy costs resulting in declining retail rents, increased vacancy levels and downward pressure on capital values in some areas.

The retail rental market was already weak in many inner and suburban retail precincts prior to the pandemic. Rental rates within established strips such as Lygon Street, Carlton and Chapel Street, South Yarra have continued their downward trend during 2020 whilst vacancy levels have increased.

There are currently significantly reduced levels of leasing demand from prospective retail tenants. Longer leasing up periods are applicable for vacant tenancies and there is considerable downward pressure on rents in many areas. Discussions with leasing agents indicate that since March 2020 there has been a significant decline in the level of enquiries received for vacant retail tenancies. The level of enquiry has recently started to improve.

New retail leasing deals have been somewhat limited given the relatively recent easing of restrictions to allow for commercial property

Chapel Street, Melbourne Source: CoreLogic

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online shopping were already slowly occurring over an extended period, however changes were accelerated as result of the COVID-19 pandemic and the government measures implemented to restrict the spread of Coronavirus.

Nathanial RamageProperty Valuer

(Emergency Measures) Bill 2020 passed in the Victorian Parliament. One of the objectives of the bill was to provide a legislative framework to facilitate the implementation of the good faith leasing principles provided in the Code of Conduct. The relief scheme, which initially ran from 29 March 2020 to 29 September 2020, has been extended by three months to 31 December 2020.

Discussions with a number of property managers, landlords and tenants throughout the lockdown periods highlighted the general mutual agreement by both landlords and tenant to arrive at suitable arrangements, subject to the commercial Code of Conduct, to allow for the continued occupation of properties throughout and after the pandemic. In part, this could be due to difficulties faced by landlords in securing new tenants in the short to medium term.

We consider that once the relevant period expires on 31 December 2020 and rent relief is no longer compulsory, some tenants may experience difficulty being able to afford the payment of full rent. In those cases where rent deferments have been agreed, some tenants will also have to pay their existing rent in addition to the repayment of deferred rent. This may place additional financial pressure on retail tenants.

If we knew back in January how 2020 would turn out, the outlook for the year would be substantially different. We certainly could not have predicted a global pandemic which would result in major changes to the way we live, work and shop. Many of these changes such as an increase in

to reopen from 28 October 2020 following an extended period of forced closure due to the impact of the COVID-19 pandemic and the implementation of Stage 4 restrictions. Distancing requirements apply for staff and customers and there is a limit on the number of people permitted within a retail tenancy at any one time depending on availability of space. In many instances, restaurant and bar operators cannot operate at full capacity as a result of the ongoing restrictions. This is negatively impacting turnover and the ability of tenants to meet their rents and other costs during this time.

The federal government announced in April 2020 a mandatory Industry Code of Conduct for commercial and retail leases across Australia to be legislated by state and territory governments. It is applicable where the tenant is an eligible business for the purpose of the government’s JobKeeper program and is for small to medium tenants with an annual turnover of up to $50 million. The Code of Conduct includes various principles for landlords and tenants which will apply during the pandemic period.

It specifies that landlords must not terminate the lease or draw on a tenant’s security and tenants must honour their lease. It also includes a provision requiring commercial landlords to accept rent reductions in proportion to a tenant’s decline in turnover due to the COVID-19 pandemic. This will be achieved through a combination of rent waivers and deferrals. There will also be a prohibition on landlords charging interest on unpaid rent and there will be a freeze on rent increases during this period. On 23 April 2020, the COVID-19 Omnibus

Of the lease deals that have occurred we have noticed a trend towards incorporating longer rent-free periods at least until the end of lockdown periods plus additional rent-free periods and shorter initial terms.

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Brisbane2020 has been a tumultuous year for retail property in Brisbane. Lockdowns and rent abatements have created an environment of significant uncertainty. To some extent the COVID 19 crisis accelerated the existing trends and as Brisbane recovers, there are some clear trends becoming evident.

The biggest impact for the retail property market in 2020 has been the COVID-19 rental relief deals, especially in the initial stages of the lockdown when cafés, restaurants, hairdressers etc were closed. Landlords and tenants had to negotiate rental relief deals and the government helped to enforce these. Landlords could also apply for Land Tax relief that had to be passed on to the tenants.

In Brisbane most of the retail properties we are valuing have no outstanding COVID-19 rental relief deals at present and to date tenants in default have been limited. The extra cash in the economy from JobSeeker, JobKeeper and mortgage relief from the banks has undoubtedly helped prop up the retail sector, however we are now entering a critical period where the removal of such support will expose the real extent of tenant weakness.

The biggest loser from the crisis to date appears to be retail property exposed to discretionary spending, particularly fashion and clothing. Accordingly, there has been a big impact in the CBD, sub- regional and regional centres, whilst suburban convenience retailing appears to have recovered well after the initial lockdown period. Neighbourhood centres have been the standout

and having tenants that have survived or flourished during COVID-19 (e.g. supermarkets or fast food).

We are not aware of any forced sales of secondary retail properties in Brisbane, which is a function of the level of cashflow support which has been available and a low interest rate environment. Our view is that yields will remain stable or firm for secondary assets as well, mostly driven by the low interest rate environment. There will however be

Queensland

performer, whilst large format retail also appears to have largely weathered the storm.

Whilst sales have been limited during COVID-19, sub-$10 million properties with strong national tenant covenants have been in high demand and yields for such properties have further compressed. This flight to quality assets is due to record low interest rates and buyers looking for security with a national tenant, a strong WALE, a prime location

Queen Street Mall, Brisbane Source: Kgbo, Wikimedia Commons

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be better placed to market their properties once their houses are in order. Investors with proven COVID-proof investments recognised that they will struggle to find a suitable replacement investment vehicle and have been reluctant to capitalise on the surge in market demand.

The true test of the tourist retail market is likely to come in 2021. Downward pressure on rentals will be mounting, however with the recent reopening of the Queensland state border, we are hopeful that the influx of domestic tourism will be enough to prop up these fragile CBD markets. As a bare minimum, we are expecting investors to reassess the risk profile of such tourism hubs which may result in yield compression.

Ryan KohlerDirector

Town Centre were more or less closed for business as locals followed government recommendations to stay at home. Meanwhile, the CBDs of Southport, Surfers Paradise and Broadbeach were ghost towns and the heavy reliance these areas have on international visitors, domestic tourism and local workers became evident.

However, there are two sides to every coin and essential retail services were thriving under the pandemic conditions, as was the case across the country.

It is these assets that were the shining light throughout 2020. With the stock market in rapid decline and interest rates at an all-time low, investors were keen to seek out these blue-chip bricks and mortar investments as a safe haven for their investment dollars, even at the height of the pandemic.

The first example we saw of such transactions was 99 Bikes at Kortum Drive, Burleigh Heads, which was offered to the market with a brand new ten-year lease to a national retailer struggling to keep up with surging consumer demand. The result was a 5.8% yield.

Not long after this, Crestwood Plaza at Molendinar was placed under offer and following a protracted contract negotiation, finally settled in recent weeks reflecting an initial yield of 6.34% and an analysed yield of 7.36%.

For the most part however, retail assets have remained tightly held. Property owners with COVID rent relief to manage have recognised that they will

bright focus on the sustainability of income once JobKeeper support is reduced.

Rental growth in 2020 has been stagnant or retracting, with landlords generally being pragmatic in respect to rental increases Whilst face rents are not really going down, incentives are increasing, so net effective rents are on the decline.

Whilst at the start of COVID-19 we feared the worst with a possible crash and uncertainty in the retail property market, 2020 has not been the disaster we were expecting and the retail market is generally (for the moment anyway) okay. There will be winners and losers, but we think the market is robust and demand from investors is still high. If the COVID-19 crisis dissipates, we consider the outlook for retail property in Brisbane for 2021 to be good, although rental growth is likely to remain stagnant.

Terry MunnDirector

Gold CoastSailing into 2020, the Gold Coast retail market was in a pretty good place. Market sentiment was strong and investment activity was back on the rise following two interest rate cuts towards the end of 2019. Sure, there were some concerns being raised as to rent sustainability in some pockets, however this was considered a fairly segmented issue.

Following the onset of the COVID-19 pandemic in March 2020, the market entered a state of flux. The impact of trading restrictions and border closures hit the Gold Coast retail sector hard and fast. Major centres such as Pacific Fair and Robina

We are not aware of any forced sales of secondary retail properties in Brisbane, which is a function of the level of cashflow support which has been available and a low interest rate environment.

Pacific Fair Shopping Centre, Gold Coast Source: Wikimedia Commons

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However, discussions with tenants indicate that retailing conditions remain difficult, even with increased weekend day trippers. A number have indicated that weekday trade is still far below typical pre-COVID trade. Some retailers are even closing on Mondays and Tuesdays due to the drop in trade on those days. This may have an impact longer term and is something to monitor in 2021.

Chris McKillop Director

TownsvilleThe retail market throughout 2020 remained at the bottom of the market cycle with COVID-19 likely accelerating the shift that was already

Agents are reporting very strong interest in multi-tenanted strips, particularly if the overall rental quantum is below $25,000 per tenant as this appeals to local tenants and these spaces are easier to fill if vacated. This follows a similar theme noted during 2019 with investors drawn to these strips despite overall WALE typically being around one to 2.5 years given the local tenant nature of the assets, typically with lease terms of up to three years.

Another recent headline sale is of a beachfront restaurant at Hastings Street, reportedly contracting at a yield of slightly below 5%. If the property settles, this will set a new record for a single strata in this area at over $10 million.

Sunshine CoastWow, what a year 2020 has been. We have reviewed our market predictions from the beginning of the year and generally we indicated that yields would remain strong despite the threat of online retail sales and high-profile corporate failures in the retail market in 2019. What we did not foresee at that time was the COVID pandemic!

One of the interesting impacts of these conditions has been the rise of local centres. These areas, particularly in hinterland townships such as Maleny, Montville, Beerwah, Cooroy and Yandina, have seen greater demand from locals. Since May, we have also seen increased weekend visitation from day trippers and this has led to strong conditions in these areas. At the start of the year, we noted that conditions had improved and this has only strengthened over the past 12 months. There are typically limited vacancies and property is tightly held in these areas.

The main retail strips such as Hastings Street, Mooloolaba Esplanade, Coolum Esplanade and Bulcock Street have had mixed impacts. All have had slight increases in tenant turnover with vacancy increasing in Mooloolaba Esplanade. In general, face rentals have been maintained, although incentives have increased in the market; these are very much dependant on location and rental quantum.

Larger $100,000-plus rental spaces are still difficult to fill in these locations.

Owner-occupiers have come to the fore in the sub $750,000 market over the past six months with a number of sales noted throughout Maroochydore and Coolum for this type of space. We have also seen a record sale in Peregian Beach in the past month with a property selling for circa $13,800 per square metre at auction to an interstate investor.

Mooloolaba Esplanade at Mooloolaba Source: Wikimedia Commons

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2-6 Trade Court, Mount Pleasant. The rental rate demonstrates no change from accepted rental value levels within this asset class. The market for retail warehouses remains oversupplied with several large tenancies now remaining vacant for extended periods.

Greg WilliamsDirector

CairnsThe Cairns retail sector has been hit hard by COVID-19. Much of the retail sector caters to the tourist trade, being cafes, restaurants, duty free stores, tour booking agencies and retail in the central business district. Without the flow of interstate and international tourists, many businesses have simply closed by choice or are opening part time. It is difficult to gauge what percentage of businesses now closed or operating part time will reopen when JobKeeper ends. Interestingly, some restaurateurs are trading well with a mix of Queensland and local clientele.

One of the main concerns is that international tourism plays a large part in the Cairns economy and it is unknown how long it will be before significant numbers of foreign travellers return to Australia and Cairns in particular. It is expected that the retail sector will continue to struggle in the short to medium term.

Commercial agents report that up to 70 per cent of retail tenants they manage requested and received rental reductions of 50 to 100 per cent of normal rent levels though many continue to pay outgoings.

on the net income of investment property (such as those still currently subject to rent deferral or waiver) and some investment property was taken off the market for sale during the outbreak of the virus in Queensland.

Retail leasing activity in the Wide Bay region has been very limited and specialty retail remains a very challenging leasing environment for landlords. If I were to look in the rear view mirror over calendar year 2020, I would say that if you didn’t suffer from loss of rental income, your investment property value would have fared well. If I knew in January 2020 what I know now, I would have recommended caution regarding investment property with a heavy reliance on specialty retail trade.

Grant CollinsProperty Valuer

Mackay – WhitsundayThe IGA anchored West Mackay Shopping Centre at 331 Bridge Road is reported to have sold for $10.4 million. Its previous sale occurred in November 2016 at $9.25 million. This most recent transaction demonstrates the enthusiasm in the market for rental income driven by businesses associated with non-discretionary trade. Sales of shopping centres with major supermarket anchors and lessors’ interests in service stations continue to demonstrate firming yields in the low interest rate environment.

4WD Supacentre has very recently taken a lease over a 2229 square metre retail warehouse at

underway from traditional retailing to on-line retail for some businesses.

There have been a number of smaller zombie businesses close their doors, however it is undetermined if these businesses would have survived regardless of COVID-19. Likewise, we are unsure if these businesses will re-open once the government support mechanisms such as JobKeeper expire. This will be very much a watch and see space over the next three to six months.

McConaghy Properties has announced a $34 million redevelopment of Castletown Shopping Centre to make way for a new Coles Supermarket, new specialty retailers, new entry statement and improved facilities. Construction is proposed to commence in February 2021 with works completed by December 2021.

Overall, the retail landscape is currently somewhat fractured with uncertainty around zombie businesses, affordability disparity and proposed redevelopments all adding to the mix.

Kylie WilliamsProperty Valuer

Wide BayRecent market evidence from Hervey Bay and Bundaberg indicates that there is still strong investor demand for good quality retail investment property as has been the case during calendar year 2020. The reported sale of the Officeworks tenanted investment property on Torquay Road, Pialba for $6.228 million reflects a yield of 5.59% which is a market leading yield that demonstrates a continuation of very strong demand for investment property with ASX listed tenants.

Based on the sales that occurred during 2020, the impact on retail investment property has been minor. There have been impacts however

Commercial agents report that up to 70 per cent of retail tenants they manage requested and received rental reductions of 50 to 100 per cent of normal rent levels though many continue to pay outgoings.

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limited the number of investment sales. The most recent retail investment sales of note in Toowoomba include:

Gore Street, Westbrook Source: burgessrawson.com.au

◗ McDonald’s and 7-Eleven – Gore Street, Westbrook: A modern service station and McDonald’s restaurant located in a satellite suburb to the south-west of Toowoomba. WALE of 12 years. Sale price of circa $8.6 million with a net yield of 5.2%.

162A James Street, South Toowoomba Source: realcommercial.com.au

◗ Battery World, 162A James Street, South Toowoomba: Small retail showroom in high exposure location. New six-year lease to national tenant. Sale price of circa $770,000 with a net yield of 6.73%.

have increased. Our forecast in February 2020 was for increased vacancy rates and downward pressure on rentals.

Then we experienced COVID-19 and the retail sector has been one of the hardest hit, with consumer spending affected by lockdown restrictions, particularly in the hospitality industry. We also note that the restrictions have also encouraged further growth in online purchases bolstered by government stimulus packages, including the ability to access superannuation.

What has this meant for Toowoomba over the past ten months or so? Retail leasing in Toowoomba has continued to be subdued and is a reflection of reduced tenant demand and the effects of COVID-19 restrictions. The restrictions saw the majority of non-essential retail outlets either close or substantially reduce trading hours during the early stages. Café and hospitality outlets that remained open reverted to takeaway businesses to maintain some level of trade and assist retain staff with the assistance of the JobKeeper subsidies where available.

The capacity to meet retail rentals is an important factor in the financial viability of retailers during this period and the Mandatory Code of Conduct for commercial leasing provided a benefit for lessees, but a potential waiver of rental for the lessor depending on negotiation outcomes between the lessor and lessee.

Investor demand has remained strong, however the lack of quality, fully leased properties has

The vast majority of these businesses are directly tourism driven along The Esplanade and around the central business district.

Agents report very little demand from potential lessees at this time and it is considered too early to identify whether there is any genuine discounting of rents from landlords, though good incentives are available for potential lessees seeking long term lease agreements. On a positive note, smaller suburban retail outlets that cater to the local market have fared much better than the tourist retail sector.

Shane QuinnManaging Director

ToowoombaLike the national retail sector, the Toowoomba CBD retail sector has faced a number of challenges over the past few years. One of the major challenges at a high level has been the growth in online shopping. In addition, increasing competition for tenants at a local level was compounded by the redevelopment of Toowoomba’s Grand Central Shopping Centre which provided an additional 140 speciality stores, attracting a number of national and international brands to the centre (and Toowoomba) and creating increased competition for existing small retail business owners.

In addition, recent development of convenience and neighbourhood centres has resulted in more retail space becoming available within the local Toowoomba market than ever before, therefore competition for tenants is strong and vacancy rates

Investor demand has remained strong, however the lack of quality, fully leased properties has limited the number of investment sales.

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255 James Street, Toowoomba City Source: realcommercial.com.au

◗ Carpet Affair, 255 James Street, Toowoomba City: Modern showroom and warehouse in high exposure location. Unexpired lease term of approximately two years. Sale price of circa $1.35 million with a net yield of 7.53%.

Recent retail development activity in Toowoomba includes:

◗ The refurbishment of Bridge Street Plaza was completed earlier this year. The centre’s supermarket tenancy was extended to accommodate Aldi and a number of new specialty tenants have been secured. The centre is now being marketed for sale.

◗ Construction of the new Coles supermarket in Glenvale has been completed with the store opening for trade in August. The centre includes the supermarket, a Liquorland and a café.

◗ Construction of a new Aldi supermarket in Highfields commenced in June this year. This will be the fourth Aldi in the Toowoomba area.

◗ Ongoing refurbishment of the Wilsonton Shopping Centre.

◗ A new KFC restaurant in Highfields.

Ian DouglasDirector

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Adelaide2020 has been the year of endless plot twists. This edition has once again been authored from a makeshift home office, much like earlier Month in Review articles from March through to June.

South Australia was plunged into a six-day lockdown from midnight on Wednesday, 18 November, a lockdown which only ended up lasting three days. Students, staff, teachers, hospitality, construction workers and all other non-essential employees were sent to work from home as the state government aimed to stamp out the Parafield COVID-19 cluster that originated from a medi-hotel worker. The lockdown was short-lived and restrictions lifted on Saturday, 21 November at midnight as contact tracing and South Australia government officials learned of false information provided by a confirmed case. As a result of this, SA Health was confident there were known links between all the cases and no evidence of community transmission throughout the state.

As touched on in previous editions, sales volumes for all types of property have been at low levels throughout 2020. With the restrictions on open inspections earlier this year, owners were hesitant to list their properties for sale. With the limited stock hitting the market recently, price points have remained relatively stable with buyers competing for fewer properties than usual. The retail sector hasn’t seen a lot of growth in rental rates over previous years and that has again been stalled this year with many retail tenants being offered short term rental relief and rental abatements, an

attempt by investors and owners to keep tenants in the properties long term.

Despite the slump in listings and sales, there have been some notable sales in 2020. Most significant of these is the sale of Adelaide’s Regent Arcade, which transacted in March for $48.5 million. Regent Arcade is located in Rundle Mall in the heart of the CBD and was sold to a Hong Kong based buyer in an off-market deal. A Bunnings store located at 432 North East Road, Windsor Gardens, sold in early November for $48.05 million. There is limited information available surrounding the transaction, however research indicates the purchase is part of a Charter Hall acquisition of a $353 million portfolio of six Bunnings stores around the country.

All retail property owners have had to be incredibly flexible and adaptive this year. Reducing overheads at brick and mortar stores while also enabling the business to trade online have been two pivotal components of surviving this year. Having said that, a number of businesses have flourished in 2020. Supermarkets such as Coles and Woolworths have seen increases in sales due to panic buying occurring over the past few days and earlier this year in March. Hardware stores such as Bunnings and Mitre 10 have also seen sales rise as people embark on home improvements, taking the opportunity of being stuck at home to give the

walls a fresh lick of paint, fill the cracks or get started on that DIY renovation. Retail businesses have all had to adapt at various points throughout the year, with restrictions limiting the number of patrons within cafes and pubs, and all stores setting up sanitisation stations and introducing guidelines to ensure people can keep 1.5 metres apart while shopping.

At a time when the Adelaide CBD would typically be bustling with workers and Christmas shoppers, the city was plunged into three days of relative silence. The three-day lockdown was yet another setback for retailers in Adelaide as their trade was again restricted. As has been evident this year, retail is the first to go and the last to come back. Restrictions introduced to stop people gathering in

South AustraliaFinally, if we had known what this year had in store back in January, the sound advice would have been to avoid retail property in 2020.

An empty Rundle Street Source: Roy VanDerVegt (7 News)

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large groups and going out to eat or drink resulted in many people, in particular older generations, becoming more acclimated with online shopping.

Finally, if we had known what this year had in store back in January, the sound advice would have been to avoid retail property in 2020. With tenants being provided rent relief and rental abatements, retail has looked a poor choice from an investment point of view. The first retail edition of the Month in Review for 2020 back in March highlighted the decline in sales volumes of retail property in 2019 compared to 2018, and it’s safe to say conditions have only deteriorated further this year. This earlier edition emphasised the importance of retailers adapting to embrace the online domain, as well as the fact that supermarkets will remain major anchor tenants for the foreseeable future.

While the year has been challenging for all, retailers who have been able to weather the storm must look forward confidently knowing that they have overcome one of the greatest challenges their business could have faced.

Chris WinterCommercial Director

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PerthAs we look back on the year that was for the Perth retail property market, it is a tale in three parts: pre-pandemic, during lockdown and post lockdown.

Prior to the advent of the COVID-19 pandemic, the retail property market in Perth was already facing challenging conditions. Demand for retail space was hampered by restrained consumer spending due to perceived increases in the cost of living, high household debt and slow wage growth coinciding with the state’s sluggish economic performance. Online retail spending was proving ever-popular and was applying further pressure on the viability of bricks and mortar retail.

Unfortunately, the COVID-19 pandemic only made the situation worse. Its impact on the trading ability of businesses across almost all retail property classes was severe and pronounced.

In the three months from March, when COVID-19 swept into Western Australia, the retail property market would be characterised by an unprecedented level of uncertainty and witness a pronounced slump in activity.

During this time our team observed the following:

◗ Tenants offering non-essential services (e.g. hospitality) were forced to either shut shop for the foreseeable future or significantly alter their business operations in line with government-imposed restrictions;

◗ Tenants were actively seeking rent relief;

◗ Leasing deals were often falling over during negotiations or were significantly re-drafted to account for uncertainty over the next few months;

◗ Listings were often withdrawn as landlords and vendors adopted a wait and see approach;

◗ The level of enquiry for both sales and leasing generally plummeted;

◗ The number of empty shops rose across Perth including the CBD malls and traditional high street locations (Oxford Street, Leederville; Beaufort Street, Mount Lawley; and Bay View Terrace, Claremont).

The product of the above was a lack of transaction activity. The notable exception however was demand for investment grade retail property (e.g. neighbourhood shopping centres). These assets remained highly sought after, often meeting key criteria sophisticated investors continue to seek such as long remaining lease terms (i.e. WALE), non-discretionary tenancy mix backed by strong lease covenants and sound locational attributes with a growing population catchment.

The resilience of this asset class actually heightened the appetite for such convenience-based centres in the wake of the COVID-19 pandemic, however there remained limited stock

Western Australia

Beaufort Street, Mount Lawley Source: realestate.com.au

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available for acquisition. Vendors were reticent to sell despite the tight yields being achieved given insufficient levels of return available from alternative investment vehicles.

On a less positive note, there are a number of discount department stores in sub-regional shopping centres confirmed or mooted to be vacating in the near future. Backfilling these tenancies may prove challenging.

From Saturday, 27 June, Western Australia entered Phase 4 of its recovery road map, meaning further restrictions were lifted by the state government. This decision, on the back of successfully containing the virus for some time and closure of the state’s borders, provided a welcome boost to the local economy with a palatable increase in consumer and, to an extent, business confidence.

The Western Australian government subsequently announced an extension of the Code of Conduct for retail tenancies for a further six months until 28 March 2021. The announcement was met with opposition from prominent landlords, questioning whether the measures were needed beyond 30 September, as owners had already incurred significant costs.

As of 14 November 2020, Western Australia transitioned to a controlled border policy allowing travellers from low risk states and territories to enter without undertaking quarantine. This latest measure is one more step towards returning to business as usual and this can only assist the state’s retail property sector as we approach 2021 notwithstanding the prevailing head winds.

Greg LambornDirector


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DarwinThe initial shock associated with COVID-19 restrictions was as severe in Darwin as it was in the rest of Australia, however restrictions were eased in the Northern Territory well ahead of most other parts of the country. Nevertheless, retail businesses associated with hospitality had to re-focus their efforts on local consumers rather than the traditional interstate and international tourists Darwin normally attracts throughout the dry season. There was and still is significant government assistance to do this and support these businesses.

Most of the retail property transactions in Darwin this year have involved larger scale properties. The sales of Bunnings Palmerston, Bakewell Shopping Centre and the Parap Hotel were all made to corporate type interstate investors at the very low yields associated with these types of transactions regardless of their location in Darwin or elsewhere.

There have been very few local transactions with most Darwin retail property being tightly held by long-term local owners who would be reluctant to sell in the weak economic climate evident even pre-pandemic. However, the limited number of sales tend to indicate that the sector remains under downward pressure.

An extreme example is the site of the Globetrotters Bar and backpacker lodge which sold in 2020 for about one-third of its sale price in 2017. Whilst there were a number of significant factors regarding this sale, it is indicative of the weak demand for property in some specific market segments in Darwin, especially the hospitality and entertainment sectors.

On a more positive note, property associated with non-discretionary expenditure, such as suburban shopping centres, has seen rents remain relatively stable, albeit that the rents being received were already at low levels at the start of the year. Some discretionary type businesses (such as automotive and boating) have also enjoyed strong trading conditions because this money is being spent in Darwin rather than, say, Bali.

Terry RothDirector

Northern Territory

An extreme example is the site of the Globetrotters Bar and backpacker lodge which sold in 2020 for about one-third of its sale price in 2017.


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CanberraThe retail market has faced a challenging year due to the COVID-19 pandemic with many retail businesses seeing reduced trade. With offices supporting employees working from home, there has been less foot traffic in the office precincts of the Canberra CBD, inner morth and inner south.

Many large national bulky goods retailers that have online ordering systems have been reporting strong sales figures. According to the 2020 eCommence Industry Report released by Australia Post Group, online shopping increased by 102 per cent in the ACT for 2020. The national average year-on-year growth is 95 per cent. The ACT is ranked as having the second highest online shopping growth in Australia after Victoria at 111 per cent.

Traditional retail however, such as clothing, footwear and personal accessories, has been stretched to the limit. We have seen landlords offering COVID-19 relief to existing tenants in the

form of short term rent free periods and rental deferments. Many tenants are under high levels of financial stress and are actively taking advantage of government stimulus packages.

Leasing activity has still been active with landlords and tenants continuing to come to terms, however we have seen higher incentives from ten to 20 per cent of gross lease value being offered in the current market.

Retail activity in the university commercial precincts has been impacted by international border closures. According to an ABC news release on 16 September 2020, international student numbers in 2020 are down to below 2017 levels and will likely fall further in 2021 (a 30 per cent reduction from 2019). As a result, universities in the region have been forced to reduce their workforces throughout the year and further reductions are expected next year.

There have been limited sales over the past six months, generally small suburban retail units in the sub $1 million range. Yields in this category in the inner city areas are ranging between 5.50% and 6.5% with good quality tenants and longer WALEs attracting tighter yields.

The Cheesecake Shop in Wanniassa sold in July 2020 with a yield of 4.97% and WALE of 5.19 years. The sale price shows $7,330 per square metre.

The Cheesecake Shop in Wanniassa Source: realcommercial.com.au

Overall, the COVID-19 pandemic has had a significant impact on the Australian economy. The sustainability of many retail businesses will not be revealed until the government programs and schemes are removed or no longer seen to be relevant. We will be watching the retail market in the new year with keen interest.

James FeeneyValuer

Australian Capital Territory

Leasing activity has still been active with landlords and tenants continuing to come to terms, however we have seen higher incentives from ten to 20 per cent of gross lease value being offered in the current market.

ACT – 102% National – 95%

2020 percentage increase in online

shoppingSource: eCommence Industry Report released by Australia Post Group

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